SEC and CFTC Bullish on Future of Cryptocurrency

SEC and CFTC Bullish on Future of Cryptocurrency

Recently, the heads of the US Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) came together to discuss cryptocurrency regulation with members of the US Senate Banking Committee.

J. Christopher Giancarlo, the chairman of the CFTC, spoke in favor of blockchain technology, acknowledging that there was no way it could exist without Bitcoin. He also touched upon how his children were also investing in Bitcoin, saying it was exciting for him to see them interested in the world of finance.

“We owe it to this generation to respect this generation’s interest in cryptocurrencies, and punish those who persecute,” said Giancarlo.

Giancarlo's comments were well-received by crypto observers. Image from fortune.com

Giancarlo’s comments were well-received by crypto observers. Image from fortune.com

Significantly, he also acknowledged Bitcoin as a commodity when viewed as a store of value, similar to gold but conceded that it also seemed to function as a security and currency at times. However, the lack of jurisdiction meant that cryptocurrency exchanges did not need to adhere to the same regulations imposed on stock exchanges, something Giancarlo said may change in the near future.

“We may be back with our friends from Treasury and the Fed to ask for additional legislation,” he told the Senate Banking Committee, as reported by The Washington Post.

Although the chairman of the SEC, Jay Clayton, was less bullish on the future of cryptocurrencies, he acknowledged that they had a role to play in a futuristic financial ecosystem.

More interestingly, Clayton’s focus appeared to be squarely on ICOs, suggesting that they must be regulated as investors in legitimate opportunities “deserve the full protections” of the federal securities laws reported Cointelegraph.

“This ever-present need comes into focus when enthusiasm for obtaining a profitable piece of a new technology “before it’s too late” is strong and broad. Fraudsters and other bad actors prey on this enthusiasm.”

He added that no ICO in the past had ever registered with the SEC, and was firm in his belief that they should be regulated like security offerings. The SEC would also actively crack down on illegal ICOs enabled by accountants, lawyers, and other professionals in the burgeoning, but unregulated, industry.

“A note for professionals in these markets: Those who engage in semantic gymnastics and elaborate structuring exercises…are squarely in the cross-hairs of our enforcement division,” said Clayton, as reported by Quartz.

ICOs must be regulated according to Clayton. Image from rtlz.nl

ICOs must be regulated according to Clayton. Image from rtlz.nl

Both Giancarlo and Clayton acknowledged that cryptocurrencies were intrinsically tied to the development of blockchain technology, and were eager to see it continue growing without burning parties invested in it. According to the pair, audiences need to be educated about Bitcoin and other cryptocurrencies, but fraud ICOs and other scams must be pursued aggressively by a taskforce to protect investors. Regulation is also a must, which would allow cryptocurrencies to grow at a healthy rate in the US, potentially marking the country as a leader in the world of cryptocurrency.

At the time of writing, the top 100 cryptocurrencies as listed on CoinMarketCap are all in the green, highlighting how much of an effect the comments of Giancarlo and Clayton may have had on the industry. Investor confidence is clearly on the up, especially with large trading volume seen on many major exchanges around the world.

The only question now is what steps regulators plan to take to keep an eye on the crypto space, or what jurisdiction these bodies will have over the futures markets or exchanges. Whatever the outcome, the acknowledgment and broader acceptance of such technology can only be good for the industry as a whole.

Cover image from coinwire.com

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